• Uninviting an Audit (Proper Restaurant Tip Reporting)

According to estimates, restaurant servers earn 58% to 61% of their income through tips. The IRS requires any employee who receives more than $20 per month in tips to report those tips to his or her employer at least monthly. Management must report employees' tips to the IRS and withhold taxes.

Accurately reporting tips is far from easy and a huge headache for restaurants.

In general, the IRS expects that you will be reporting 8% of total food and restaurant sales towards tips. Although the IRS uses 8% as a threshold in determining compliance, all employees and restaurants are required to report 100% of all tips to the IRS.

The situation gets even more complicated in restaurants that do not have servers or table service. Quick service restaurant employees who traditionally don't receive tips are still required to report any tips that they may receive. Many quick service restaurants have a tip jar encouraging customers to volunteer a tip.

Tipping has implications related to minimum wages. If a state has an $8 per hour minimum wage and that employee is paid $3 per hour, you must show and report that the employee earn at least $5 per hour in tips.

Many restaurants use tip pooling. All tips collected by waited are pooled into a single fish bow. The tips are than divided amongst the entire wait staff and perhaps other restaurant employees. According to case law, managers, supervisors, cooks and dishwashers may not be included in a tip pool. The maitre d' and host positions may be included.

To make matters even more complicated, the wait staff frequently splits tips with other restaurant employees. For example, a waitress may hand over $20 of her tips to an employee that cleans off her tables.

...and what about valet service? It is an almost universally accepted practice that valet attendants are treated by restaurants as independent contractors, or as a company whom the restaurant has outsourced service. Restaurants are not off the hook. They can be held responsible for unpaid taxes, overtime pay and even minimum wage laws even if the restaurants may deem their employees to be independent contractors.

I am kind of surprised about the lack of knowledge and paperwork smaller restaurants have related to tipping. Most of the small single restaurant owners that I haven spoken to have very sloppy tipping records. Fortunately for those owners, smaller restaurants are rarely scrutinized by the IRS. However, those who do get audited have one big mess to clear up. I've also noticed that although many employers are ignorant of the laws related to tipping, disgruntled employees have the equivalent of a law degree when it comes to minimum wage laws and tipping laws.

Read more about tipping in What Employees Need To Know About Tip Reporting at:

http://rrgconsulting.com/tip_reporting_article.htm

Read more about tipping on the Restaurant Association website at:

http://www.restaurant.org/legal/tips/basics.cfm

• Best Retail and Restaurant Websites, Part 2

Here are two more sites on my list of the best retail and restaurant websites (for business owners and managers).

You may want to place each of these sites on your browser favorites list and consider visiting each site at least once per week.

hgosman@pcamerica.com

To read Best Retail and Restaurant Websites, Part 1, go to:

Convenience Store News is geared towards convenience and petroleum retailing.

Although industry specific, any retail or restaurant owner or manager will find the website  informative and useful. The front page offers latest articles and news of interest to all retailers.

Visit Convenience Store News at:

http://www.csnews.com/csn/index.jsp

The Restaurant Doctor

"Be better than you have to be...before you have to be that good."

"Are you tired of competing? Would you rather lead the pack and have the others chasing you for a change? My subscribers know that you don't have to be bad to get better ... and that if you are not continually improving, you are surely losing ground."

Bill Marvin is The Restaurant Doctor. He has a rather loud, pushy type selling site. However, he offers lots of great free information for restaurants. On the left hand side of his site, subscribe to his FREE weekly newsletter listed under "Free Resources." You won't have to spend a penny to get lots of FREE information and ideas within his FREE site and newsletter.

• Windows 7 Watch

According to Net Applications, Windows 7 has a 4.00% market share as of December 1, 2009 (based on the average for the past 30 days). Recent data shows that Windows 7 now has 5.31% of the market.

The Windows XP market share has dropped to 69.05%.

Net Applications obtains its statistics by monitoring the operating systems used by internet users.

To see operating system usage totals, go to:

http://marketshare.hitslink.com/operating-system-market-share.aspx?qprid=10